Sadly, the Tokyo Olympics have finished. After 17 months of living with Covid, 17 days of sporting endeavour have come to a close. Luckily, we only have to wait three years for the next one!

I am fascinated by sport and often marvel at the wise words that are spoken by many of the athletes. Much of what athletes do and say has a direct relevance to financial planning.

In this article I would like to concentrate on two aspects – marginal gains and focus.

Adam Peaty at the age of only 26 holds the world record for the 100m breaststroke. He also holds the top 20 fastest times ever recorded. He explains that much of his training is focused on striving to find ‘the extra 1%’. He is open to new ideas to achieve these marginal gains. British cycling, once again successful at the Olympics, worked on the philosophy that lots of marginal gains (a 5g weight reduction here and there) would translate into a margin big enough to win consistently.

Another area of an athlete’s winning mentality is that of focus. Jessica Ennis-Hill advises not getting caught up in what everyone else is doing. Instead, she says, focus on yourself and controlling what you’re capable of. It’s very easy to worry about what your rivals are doing, but you can’t control any of that.

These are but two examples of how sporting success can be used to deliver successful financial planning. To have a successful financial planning experience you have to do more than become financially fit, you have to remain financially fit. One of the most important ways of achieving this is to partner with a real financial planner for the rest of your life.

Adam Peaty and Jessica Ennis-Hill would not have achieved their successes without a coach to introduce them to new ideas and to impose a degree of discipline to their training. A real financial planner fulfils a similar function.

A real financial planner, providing ongoing advice, can help you to identify the things that matter and the things that you can control. The key is concentrating on those areas where these two priorities overlap. As an example, we can’t control the rate of inflation or when the next stock-market downturn will occur. However we can control (to a degree) our expenditure so that we can react sensibly to adverse events. It’s a bit like sailing, you have to continually adjust your steering to reach the destination.

One final point. Successful athletes concentrate on the value that their coach can bring, not solely the cost of employing them.

September 2021